Hospital Groups File Lawsuit to Stop Cuts for 340B Hospitals

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Posted: Tuesday, November 14, 2017 6:42 pm | Updated: 4:39 pm, Wed Nov 15, 2017.

WASHINGTON, D.C. -- The American Hospital Association, the Association of American Medical Colleges and America’s Essential Hospitals filed a lawsuit against the U.S. Department of Health and Human Services in the U.S. District Court for the District of Columbia to prevent significant Medicare payment cuts for hospitals that participate in the 340B Drug Pricing Program. The three hospital associations are joined in the suit by hospital plaintiffs: Eastern Maine Healthcare Systems, in Brewer, Maine; Henry Ford Health System, in Detroit, Mich.; and Park Ridge Health, in Hendersonville, N.C., part of Adventist Health System.

For 25 years, the 340B program has enabled hospitals and other organizations that care for many low-income and uninsured patients to purchase certain outpatient drugs from pharmaceutical manufacturers at discounted prices. The program allows participating hospitals to use the savings from the discounts to provide an expanded range of comprehensive health services to their local communities, such as increased access to care, clinical pharmacy services, community outreach programs, free vaccines and transportation to follow-up appointments. The 340B program constitutes less than 2.8 percent of the $457 billion in annual U.S. drug purchases and achieves savings for hospitals at no cost to taxpayers.

The lawsuit argues that the 340B provisions of the Centers for Medicare & Medicaid Services’ outpatient prospective payment system final rule violate the Social Security Act and, therefore, should be set aside under the Administrative Procedure Act as unlawful and in excess of the HHS Secretary’s statutory authority. The requested injunction would prohibit HHS from implementing these provisions of the OPPS final rule pending resolution of this lawsuit. CMS in the final rule reduces by nearly 30 percent, or $1.6 billion, Medicare payments to certain public and non-profit hospitals for outpatient drugs purchased under the 340B program.

"From its beginning, the 340B Drug Pricing Program has been critical in helping hospitals stretch scarce federal resources to enhance comprehensive patient services and access to care," said Rick Pollack, president and CEO of the AHA. "CMS’s decision to cut Medicare payments for so many hospitals for drugs covered under the 340B program will dramatically threaten access to health care for many patients, including uninsured and other vulnerable populations. This lawsuit will prevent these significant cuts from moving forward."

SOURCE: American Hospital Association

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